Intel sees slow start to 2003 tech spending

Jan. 8, 2003 – Santa Clara, CA – Intel Corp. sees little improvement in technology spending in the next six months but hopes demand from new markets like China will drive an improvement in the second half, a top official said.

“We don’t expect a big up tick in spending in the first part of 2003,” Tom Kilroy, Intel’s VP for sales and marketing group, told Reuters. “We are hopeful that overall, we will see a pick-up in 2H03. We’re very optimistic about the emerging markets, that’s the exciting area … It will continue to outperform.”

Last month, Intel raised its 4Q revenue outlook to $6.8 to $7 billion, from an earlier forecast of $6.5 to $6.9 billion, citing higher sales in Asia and stronger demand for its microprocessors.

“More and more of our revenue is coming from emerging markets and the highest percentage of that business comes from the channel or independent system builders,” Kilroy said.

“What we do know is that there’s a more consistent spending pattern in Asia Pacific,” he said, adding that governments as well as small businesses were spending on information technology.

“When I look at 2003, I expect strong growth in China, in India and increasingly, a greater contribution to our growth from Southeast Asian countries,” Kilroy added.

In China, for instance, Kilroy said Intel plans to move into second- and third-tier markets outside of Beijing and Shanghai.

“What we expect for 2003 is a significant growth pattern in the mobile segment,” Kilroy said. “We will see a bigger growth curve in this emerging area, and if you look at over a four- to five-year horizon, I think you’ll start to see a shift from desktop into mobile as convergence of communications and computing happens.”


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